Mechanics Loan & Savings Institute (Hagerstown, MD)

Episode Information

Episode UID
65001871581
Episode Type
Run → Suspension → Closure
Bank Type
savings
Bank ID
6500187 routing
Routing Number
65-0018
Start Date
September 28, 1931
Location
Hagerstown, Maryland (39.642, -77.720)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
30005e2ecca49d2f

Response Measures

None

Description

Suspension placed the bank in the state commission/receiver and it did not reopen as an operating bank; later liquidating dividends were paid.

Events (6)
1. September 28, 1931 Receivership
Newspaper Excerpt
This institution is in the hands of the State bank commissioner.
Source
newspapers
2. September 28, 1931 Run
Cause
Rumor Or Misinformation
Cause Details
Heavy withdrawals and 'false and unfounded rumors' circulated after failure of Central Trust Co., causing steady deposit outflow.
Measures
Directors requested State bank commissioner to take charge; posted notice that institution is in hands of State bank commissioner.
Newspaper Excerpt
it was learned a steady seepage of deposits since the failure of the Central Trust Co. is responsible for the bank's closing.
Source
newspapers
3. September 28, 1931 Suspension
Cause
Rumor Or Misinformation
Cause Details
Board suspended operations after depletion of liquid assets from heavy withdrawals driven by rumors and fallout from Central Trust failure.
Newspaper Excerpt
We announce with regret that we have felt it necessary to suspend the business of the Mechanics Loan & Savings Bank for the protection of our depositors... a notice on the door stated that 'This institution is in the hands of the State bank commissioner.'
Source
newspapers
4. July 24, 1932 Other
Newspaper Excerpt
The Mechanics' Loan & Savings Bank, is preparing to pay out an initial dividend of about 20 per cent next month. There will be 5,387 depositors to receive checks next week
Source
newspapers
5. September 9, 1933 Other
Newspaper Excerpt
State Bank Commissioner Ghingher, receiver for the Mechanics Loan and Savings Bank of Hagerstown, has been authorized by court to make an additional distribution of 10 per cent to depositors of the institution.
Source
newspapers
6. April 8, 1936 Other
Newspaper Excerpt
Checks for sums aggregating $86,669 and representing a 5 per cent payment have been mailed to depositors of the Mechanics Loan Bank by the receiver today.
Source
newspapers

Newspaper Articles (11)
1. September 28, 1931 Evening Star Washington, DC
Article from Evening Star, September 28, 1931

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Article Text

Frederick and Hagerstown Failures Are Traced to Central Trust. WITHDRAWALS HEAVY, SAYS COMMERCIAL HEAD Board of Directors Requests State Commissioner to Take Charge Immediately. Special Dispatch to The Star. FREDERICK, Md., September 28.Affected indirectly by the recent failure of the Central Trust Co. of Frederick and its 11 branches, two more Maryland banks and three branch institutions closed their doors today. The institutions which failed to open this morning are the Mechanics Loan and Savings Bank of Hagerstown and the Commercial Bank of Maryland, at Frederick. The latter bank has branches at Adamstown, Jefferson and Mount® Airy, which also were closed. It was understood both of the banks closed today sustained heavy withdrawals of deposits following the closing on September 3 of the Central Trust Co. and its branches, operated by Emory L. Coblentz. Casper C. Cline, president of the Commercial Bank of Maryland, issued the following statement: Board Orders Action. "Foliowing the closing of the Central Trust Co. of Maryland and 11 branches on September 3. various rumors and gossip of a damaging nature have been circulated about this institution, causing large withdrawals and the giving of notices for a very considerable amount of time-deposit money soon due for payment. It was ordered by the board of directors at a special meeting this morning that we request the bank commissioner of Maryland to take charge of the bank immediately. "This action was felt necessary to protect interests of all depositors and stockholders. Notwithstanding the present deflation and unusual depression through which we are passing, we believe the depositors should receive the amounts due them. It is most regretable, indeed, that this action has been found necessary, but every possible effort has been made to prevent it and no other prudent course remains open in fairness to depositors and stockholders. Consideration may be given to a plan of reorganization, but nothing definite can be stated at this time." Capitalized for $400,000. Mr. Cline's bank is capitalized for $400,000 and has resources of $3,200,000. This would make its deposits amount to approximately $2,080,000. A notice on the door of the Mechanics' Loan & Savings Bank stated that "This institution is in the hands of the State bank commissioner." The directors of the Mechanics' Loan & Savings Bank, at Hagerstown, issued this statement: "We announce with regret that we have felt it necessary to suspend the business of the Mechanics Loan & Savings Bank for the protection of our depositors and for the best interests of our many stockholders. During the past two years we have been suffering from the effects of the general depression existing throughout the Nation, and the unusual demands made upon this institution by its depositors have depleted its more liquid assets. "On July 1, 1930, the deposits of our bank were nearly $3,000,000, and at the close of business last Saturday we had on deposit a total of $1,970,632. We have endeavored to be conservative in the management of our institution and have tried to render at all time to this community efficient banking service. "It was impossible to liquidate our mortgages and other investments rapidly enough to meet the unusual demands made upon us, resulting from false and unfounded rumors recently circulated by irresponsible persons. Acting in the best interest of our people and the community at large. we did not feel justified in sacrificing the value of our assets, and our final action is the result of our best judgment in this regard. Although we regret the necessity of this action, we feel confident that with proper and orderly liquidation our depositors will be paid. Henry Holzapsel, president of the bank, refused to make any statement at this time, but it was learned a steady seepage of deposits since the failure of the Central Trust Co. is responsible for the bank's closing. The bank's statement of June 30, 1931, showed resources of $2,950,489 and deposits, both savings and special, of $1,756,730. George W. Page, State bank commissioner, began an examination of the books of both institutions this morning. The Central Trust Co. at the time of its failure held deposits of $14,000,000, about one-third of the total bank deposits of Frederick County. Coblentz blamed frozen assets and "miserable publicity" received by himself in connection with the Federal investigation of the F. H. Smith Co. of Washington for the bank's failure. Coblentz is under indictment in Washington on a charge of aiding in commission of perjury in connection with the operations of the Smith company.

2. September 28, 1931 The Washington Times Washington, DC
Article from The Washington Times, September 28, 1931

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Article Text

TWO MARYLAND BANKS CLOSE Two of the leading banks in Western Maryland closed their doors today and were placed immediately in charge of the bank commission of Maryland. Both served notices by pasting cards on the front door stating simply that the institutions had closed. In both cases, the closing was made without any advance notices or hints of distress to the depositors. The institutions are the Commercial Bank, the second largest financial institution in Frederick, and the Mechanics Loan and Savings Bank, of Hagerstown. The latter was known throughout Washington county as a "good substantial bank" and was one of six banks in Hagerstown. Blame Central Trust Officials of both institutions place the blame for their closing on runs resulting from the closing of the Central Trust Company of Maryland, with headquarters in Frederick. on September 3, last. Caspar E. Cline, president of the Commercial Bank, said that rumors saying the Central concern had $250,000 deposited with the Commercial Bank caused a steady (Continued on Page 2, Col. 4.)

3. June 18, 1932 The Herald-Mail Hagerstown, MD

Article Text

TO THE CREDITORS AND THE MECHANICS AND SAVINGS Mechanics' Equity Cause No. 11791. In the Circuit Court for Washington Maryland. an order the Circuit entitled cause day of June, notice herepersons claims against the Savings Bank the said Court or before the 5th day and such hereby otherwise prectuded the distribution funds moneys In coming the hands George the Mechanics' Loan and Savings Notice hereby given to the de. the their by deposits not aforesaid. they will on amounts their the the said Mechanics' Loans and which amounts may quiring former banking room said Bank CHARLES W. WOLF,

4. July 24, 1932 Evening Star Washington, DC
Article from Evening Star, July 24, 1932

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Article Text

CLOSED BANKS PREPARE TO PAY OUT DIVIDENDS Special Dispatch to The Star. HAGERSTOWN. Md., July 23.-The first dividend of 20 per cent, representing $417,000. will be paid out Monday by the receiver, Claud Gilbert, of the First National Bank to depositors, it was announced yesterday. The bank closed last September, but efforts to reorganize delayed the payment of the initial dividend. It was estimated that an additional 40 per cent would be paid to depositors within the next 60 to 90 days. The other closed bank. the Mechanics' Loan & Savings Bank, is preparing to pay out an initial dividend of about 20 per cent next month. There will be 5,387 depositors to receive checks next week

5. July 28, 1932 The Daily Mail Hagerstown, MD

Article Text

NOW THAT MONEY IS WAITING, 2,800 HAVEN'T FOR IT Now that their money is able, there are 2,800 odd depositors who have failed thus far to call for the First National bank. where the initial installment to positors is available. Claude Gilbert receiver for the institution, said today there ap. parently was no rush on the part of the depositors get their money, alightly less than 1,500 had called for their checks thus far. He said he appreciated the fact that number of depositors wanted to avoid the rush and put calling for their money but the number who have thus far failed to call for their checks represents about two-thirds Despite the fact that the distribution of checks only began Monday, there has been decided loosening of credit here. local mer chants report. Increased buying apparent Tuesday and has been growing in momentum since. Nearly half million dollars. which has been lying idle in Washington, C., bank is being put back into circulation here and an additional $350,000 will shortly be distributed as an Initial installment to depositors of the Mechanics Loan and Savings bank. Othinstallments will be paid out to depositors of the First National bank within the next 60 to 90 days. The First National bank will be and depositors their may get checks at time.

6. August 28, 1933 The Daily Mail Hagerstown, MD

Article Text

FARMERS BUILDING Court Authorizes Mechanics' Bank Receiver To Enter Into Contract Negotiations for the purchase by the Farmers and Merchants Bank of the Mechanics Loan building reached the contract of sale stage Saturday when Judge Frank Wagaman authorized the receiver of the Mechanics Loan to enter into contract. is understood that in addition the court's approval, the okay John Ghinger, state bank commissioner, must be obtained before the transaction can be completed. Negotiations have been in profor several weeks. The gress original plan for the Farmand Merchants Bank to lease the building with option to buy. An outright sale is now conternplated. The Farmers and Merchants Bank will occupy the property. moving as soon as possible after completion of the transaction. The new quarters will permit more expansion of the bank's business and furnish the best of facil-

7. September 9, 1933 The Daily Mail Hagerstown, MD

Article Text

91 ORDER State Maryland vs. Mechanics Loan Savings Bank, body In the Circuit Court for Washington this 31st day 1933, Circuit Court for Washington County. the the parcel Washington between Square Jonathan Street, the Hagerstown. West Street feet, more or therefrom 240 feet, more brick building. which the MeSavings Bank merly conducted its banking together with all articles personal property. owned furnilocated located said building: and also the reported by John Receiver Loan Savings above entitled be and unless the be before the day tember provided copy order newspaper least times three successive before the said last mentioned Report the amount of sale EDWARD Clerk. Classified Display Public Sale

8. September 20, 1933 The Daily Mail Hagerstown, MD

Article Text

ORDER State of Maryland vs. Mechanics Loan Savings Bank, body Apply Chas. Eyerly No. Equity In the Circuit Court for Washing cial prices this Forsyth STORE to suit Storage, Mill ton tenant. rates reasonable. Apply this 31st day of August Phone PUBLIC 23rd. M., 1933, by he Clerk the Circuit all household including Houses for Rent 17 Court for Washington County antiques and tools. Mrs. Margaret sale of the parcel Eshleman 105 Linden Ave. Green- ground situated the castle. Pa. Washington Street between RAY ST.-146 Public Square Jonathan SALE OF WEST SIDE PULL-UP CHAIRS Street, the City of Hagerstown DANZER LUMBER CO. Maryland. having frontage on BEACHLEY MAKEBusiness Service Telephone SMITH West Washington Street feet, 24 FRANKLIN ST PHONE 1270 or extending back Business Service Offered 18 therefrom 340 feet, more Phone STOVES 177-M after and replaced in auto. See our complete line of brick building which the Heaters up FREDERICK room house chanics Loan and Bank Glass Shop 819W Coal Ranges merly conducted its banking Gas Stoves up. reasonable rent. Apply 246 FredMETAL Weather strip, caulking Cil Stoves erick tangible personal owned radiator Inclosures. prices MEYERS BERKSON INC. said Bank, property. furnifall work. Thomas GOOD HOUSES S. Potomac. Franklin ture. fixtures and equipment Boonsboro Phone 224 Wash., 1204 located banking THE STORE OF VALUES Cannon. 409 McDowell. W. Heating. Plumbin Roofing 22 said building. and also coal $150 10-pc. Frank Mulberry. Rm. Suite the and reportedBreakfast Rd. GROH furnace heat perfectly John Ghingher. Bank CommisLYON'S FURNITURE STORE REALTY CO. Jonathan Receiver for Me64 Franklin Phone 610-J HOUSES-3 not, call 1063, Bert Gagnon. to chanics' Loan Savings Bank, Walnut St. Very entitled clause be ratiWanted to Buy 119 Potomac St. Phone and confirmed unless cause 10 Repairing and Refinishing 29 the be shown the MARYLAND rooms, price letter. Write or before conveniences good FURNITURE- all kinds repaired. Box Herald tember this Apply St. Estimates order inserted in some POTOMAC room brick published in Hagerstown Maryland, BROS Phone 2651-R CHILD stroller: must be reason$20 least times for three Phone Harness and Leather Goods 29C before the said hot water radia- Strole Real Estate. mentioned FULL Farm harness. school surance & Loans, 101-3 tors. Call Fridinger & Co. Phone Arcade The Report states the amount of satchels: all leather goods Bldg. sale to Franklin EDWARD Clerk SUMMIT mod11 Rooms and Board furnished room bunEmployment Classified Display Rooms with Board 67 Help Wanted-Female 32 Public Sale SUMMIT

9. October 11, 1933 The Washington Times Washington, DC
Article from The Washington Times, October 11, 1933

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Article Text

Closed Hagerstown Bank Pays Dividend HAGERSTOWN, Md., Oct. 11.State Bank Commissioner Ghingher, receiver for the Mechanics Loan and Savings Bank of Hagerstown, has been authorized by court to make an additional distribution of 10 per cent to depositors of the institution. Previously a liquidating dividend of 20 per cent was paid.

10. March 12, 1936 The Washington Times Washington, DC
Article from The Washington Times, March 12, 1936

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Article Text

Bank at Hagerstown Will Pay Depositors HAGERSTOWN, Md., March 12.-It was reliably reported to day that Warren F. Sterling, receiver. will announce shortly that he will make a 5 per cent payment to depositors of the Mechanics Loan and Savings Bank in April. The payment will amount to approximately $86,000 and will bring the total payments to 50 per cent.

11. April 8, 1936 The Washington Times Washington, DC
Article from The Washington Times, April 8, 1936

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Article Text

Hagerstown Bank Payoff HAGERSTOWN, Md., April 8. Checks for sums aggregating $86,669 and representing a 5 per cent payment have been mailed to depositors of the Mechanics Loan Bank by the receiver today. The payments bring the total refund to depositors to date to 50 per cent, amounting to approximately $870,000.